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Small Business Watchdog Sues Top Brass

The patriot missile system is a prime contract for Raytheon’s engineering office in Huntsville, which employs around 700 workers. Raytheon is building a $300 million manufacturing facility at Huntsville’s Redstone Arsenal that will add an additional 300 workers, to produce SM3 and SM6 missiles.

In April, the American Small Business League filed suit against the U.S. Department of Defense in federal court in California after the agency refused to release subcontracting reports on contracts awarded to defense giant Raytheon. The case was filed after DOD declined to respond to a Freedom of Information Act request for documents related to Raytheon’s compliance with small business subcontracting goals.

The League—a contentious advocate that is often critical of the small business policies of the U.S. Chamber of Commerce and the Small Business Administration, as well as the Pentagon—says it is pursuing litigation under the False Claims Act and the Small Business Act. League officials claim major prime defense contractors consistently circumvent, with the DOD’s cooperation, laws that require 23 percent of all federal contracts to be awarded to small businesses.

In 1994, the 9th Circuit Court of Appeals ruled that subcontracting reports do not contain trade secret or proprietary information. But the Obama administration, says the League, has continued a policy of fighting the release of such reports under the Freedom of Information Act.

Small business defense contracting is big business in Huntsville. In March, the Missile Defense Agency awarded five small business contracts—each with a ceiling of $861 million—to five small businesses, and three of them have headquarters in Huntsville. The contracts are for advisory and assistance services to the missile agency, based in Huntsville. The Alabama contractors were Colsa Corp., Engineering Research and Consulting Inc. and Torch Technologies Inc.

In April, Raytheon was awarded a $128.5 million contract to extensively upgrade engineering services for the Patriot Air and Missile Defense System. Much of that work will be done in Huntsville. Raytheon IDS is the prime contractor for both domestic and international Patriot Air and Missile Defense Systems and system integrator for Patriot Advanced Capability-3 missiles.
 

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